Households failing to separate their rubbish for recycling should be made to pay extra, according to an independent environmental think tank.

The Green Alliance also wants the tax on dumping rubbish tripled within three years.

Its report, Creative Policy Packages for Waste: Lessons for the UK - published on Monday - calls for dumping recyclable rubbish to be banned.

The proposals come as the country's leading waste management company, Biffa, warns that within five years waste management will be costing the UK an extra £2bn every year.

Doing nothing is not an option

Biffa director Peter Jones

Biffa is calling for strong government incentives for a major investment in recycling equipment.

Company director Peter Jones said: "Doing nothing is not an option.

"If we fail to attain levels of
recycling achieved by our European partners a decade ago, we face European fines, increased taxes and a lack of competitiveness.

"The disposal of hazardous waste is the public's number one
environmental concern.

'Grasp the nettle'

"But 75% of household, commercial and industrial waste is thrown into holes in the ground.

"By 2020 instead of being left to rot in the ground in perpetuity, most of our waste will have to be processed on an industrial scale using advanced technology - possibly in hours and definitely
within three weeks - to neutralise it.

What counts
is the will to make progress

Green Alliance programmes adviser Julie Hill

"Without the facilities to handle this we will have a crisis on our hands."

The Green Alliance says the UK can achieve recycling rates of at least 50% by 2010, through new taxes and legislation.

It is calling for a ban on the construction of incinerators and a tax on existing ones.

Programmes adviser Julie Hill said efforts to boost recycling and cut
waste in Denmark, the Netherlands, Sweden, Switzerland and in the American states of California and Massachusetts, "show what can be done when politicians grasp the nettle and put firm measures in place".